Tipping Points: Who Gives the Most?

June 7, 2013 8:29 p.m. ET

Dear Professor Ariely,

I work as a waiter in Waikiki, and sometimes to pass the time I conduct mini-experiments with customers, altering my behavior and attitude from day to day and seeing if it increases tips (in case you were wondering, seeming sad nets the most tips).

I have noticed that those paying with credit cards leave bigger tips, but it varies by card: American ExpressAXP-0.08% users tip the most, those with Visas a little less. DiscoverDFS-0.84% card users are by far the worst. I can't quite figure this out. —V.

One possibility is that wealthier people get American Express cards, the less affluent Visa,V-1.36% and the least well-off Discover—and they tip accordingly. You should be able to test this hypothesis by looking at their spending patterns—for example, how much they spend on wine.

ENLARGE

David Plunkert

Have a dilemma for Dan?

Another possibility is that credit cards have a priming influence. If a person takes out an American Express card and looks at it, its reputation as a premium card might make the owner feel richer and therefore more generous. These feelings would diminish with a Visa card and be present even less with a Discover card (which generally is of more modest repute).

My guess is that both of these hypotheses play a role in what you've observed. To be sure, we would need to experiment by having a group of people with multiple kinds of credit cards pay in similar situations using different cards. Then we'd see if and how they change their spending.

Dear Dan,

I work with many entrepreneurs in their early innovation stage and am always intrigued by the strong (irrational) attachment they develop to their idea, often leading to their being blind to reality and to wasting time and money. How quickly do we get irrationally attached to our ideas? Is it based on elapsed time or on specific actions we take (such as presenting the idea to others)? What can be done to cure this? —Omer

The problem, of course, is not just with entrepreneurs. From time to time we all experience someone in a meeting who says something random, and not particularly smart, but then insists that we follow up on his or her brilliant suggestion.

A few years ago, Daniel Mochon, Mike Norton and I conducted experiments about what we called "the IKEA effect": As the instructions to build something become more challenging and complex, we love even more what we have created. We also showed that this effect takes place rather quickly. In perhaps the most interesting and irrational part of the whole story, we found out that we also mistakenly think other people will share in our excitement over our inferior creations.

What can we do about this? We could try to create an environment where ownership is less powerful or less associated with particular individuals. But if we manage to reduce or eliminate the feeling of ownership, are we also eliminating commitment and motivation? Maybe we should try to increase this sort of proprietary attachment. (And by the way, now that I have finished, I love my answer and think that it is very insightful.)

Dear Dan,

After I've bought an expensive or limited-edition scotch, I worry about drinking the bottle too quickly or being unable to find more once it's gone. So partly opened bottles in my closet keep accumulating. Any advice on how to enjoy my scotch rather than hoarding it? —Jonathan

The problem with hoarding (collecting) is thinking about it as one decision at a time. I would either try to think about such questions from a broader perspective ("Would I be interested in getting 24 more bottles?") or set up a rule for the number of bottles that you can have in your house at one time (let's say 10). Then you'd have to finish a bottle or give it away before you acquire another.

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